Tag: December

Categories
Business

Retail Gross sales Drop in December for Third Straight Month

Retail Sales Drop in December for Third Straight Month

Consumer spending fell for the third month in a row in December, confirming what many economists had forecast as the disappointing Christmas season for many retailers and restaurants.

Retail sales fell 0.7 percent last month, the Commerce Department said on Friday as the economic recovery showed signs of stagnation and the number of viruses spiked across the country, causing shoppers to shut down stores amid a new wave of Avoid restrictions.

For the second straight month, the decline was worse than predicted by most economists, showing that the deterioration in the overall economy in the final quarter of 2020 was deeper than expected.

“In one line: grim,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, of December retail sales in a research note on Friday.

“We believe the fear of the third wave of Covid and the restrictions imposed across much of the country to suppress it have caused most of the damage to retail sales in the past two months,” he added added.

The decline was widespread in many categories, including electronics, auto, and grocery and beverage stores, which saw high spending last spring and summer but fell towards the end of the year. Restaurant spending fell again in December as cases and closings rose.

The decline most likely also reflects how retailers’ strategies of offering vacation deals early in fall spread the holiday shopping season over months, and may have dampened sales closer to Christmas.

The Commerce Department also revised its November sales data, showing a 1.4 percent drop, larger than the 1.1 percent drop previously reported.

Weaker consumer spending, which accounts for 70 percent of the U.S. economy, adds to the urgency of the $ 1.9 trillion economic bailout proposed by the new administration in Biden this week, which will increase direct payments to individuals by $ 1,400 would increase.

“This is likely the low point for retail sales as the late December incentive and the upcoming incentive under the Biden administration will improve both bank accounts and consumer sentiment,” Robert Frick, corporate economist with Navy Federal Credit Union, said in a Explanation.

However, other economists said Americans would be more likely to save their stimulus money than spend it over the next few months, especially as stores remain closed.

The retailers trade group searched for the bright spots in the trade report, highlighting that vacation shopping was higher last year than it was in 2019, with sales up 8.3 percent.

“With the virus spreading, government restrictions on retailers, and heightened political and economic uncertainty, consumers turned to gifts that lifted the spirits of their families and friends and made them feel normal in the challenging year,” said Matthew Shay, president the National Retail Federation said in a statement.

However, there is evidence that more and more of these sales are going to huge retailers who have been able to use their scale and digital skills to gain larger market share during the pandemic.

One such retailer, Target, said Wednesday that its November and December sales were up 17.2 percent year over year, driven by both in-store and online shopping. Target’s digital revenue was the largest area of ​​growth, more than doubling from the 2019 Christmas season. The vast majority of these deliveries came from Target stores.

Amazon has also said that its Christmas sales hit a record high in 2020 but has not yet provided detailed figures.

Overall, online shopping over the 2020 vacation increased 32 percent year over year to $ 188 billion. However, the weakness in retail sales in December shows that despite the surge in e-commerce, the majority of consumer spending – such as groceries, auto sales, and restaurants – is still in physical environments that remain constrained due to the pandemic.

That reality, Shepherdson said, means that despite the expected stimulus for consumers in the first few weeks of the Biden administration, spending could remain depressed for the next several months.

“We anticipate consumer spending will have problems until the falling Covid cases allow restrictions to be relaxed from March,” he said.

Categories
Business

This chart exhibits how the restaurant trade’s restoration stumbled in December

This chart shows how the restaurant industry's recovery stumbled in December

The hospitality industry spent most of 2020 recovering from the coronavirus pandemic, but poor sales worsened in the final month of the year.

According to the NPD Group, US restaurant chain transactions declined 10% in December compared to the same period last year. The company tracks transactions in 75 restaurant chains that together account for more than half of the commercial restaurant traffic in the United States. By December, the monthly decline in restaurant transactions had been improving steadily since April. Transactions in November were only down 8%.

However, the industry’s recovery has been hampered by a renewed spike in new Covid-19 cases, which led government officials to reintroduce strict food restrictions, and winter weather that has kept customers from dining outside.

The full-service restaurant segment is hardest hit by the pandemic. The sector, which includes Darden Restaurants’ Olden Garden and The Cheesecake Factory, found it harder to focus on delivery and takeaway as indoor eating was banned. Unlike fast food chains, full-service restaurants are not known for their convenience, and their food is not designed for travel.

At its low point in April, transactions in the full-service segment fell by 70%. In December, transactions were only down 30%. A new wave of indoor food bans has hit personal sales. And take-out and delivery sales aren’t enough to offset the decline in sales that resulted from fewer dine-in customers, according to the UBS Evidence Lab.

On the other hand, the fast food sector has recovered much faster. Until July, weekly transaction declines were in single digits. The segment benefited from previous investments in drive-through lanes, digital ordering and acceleration of service. And its great deals appeal to budget-conscious consumers who grow in numbers during a recession.

The NPD group only pursues restaurant chains. Bank of America consumer data shows that chain restaurants recover much faster than independent restaurants. Independent institutions typically do not have the same access to capital as chains. And while the federal government’s Paycheck Protection Program was created to help small businesses through the crisis, big chains like PF Chang’s and TGI Friday’s have devoured millions of dollars.

The catering industry is pushing for more relief for bars and restaurants. Before the latest stimulus package was drafted, President-elect Joe Biden said he would support grants for restaurant loans. The House of Representatives passed a similar bill in October that gave the industry a $ 120 billion lifeline. After the Democrats took two Senate seats in Georgia this week, it’s more likely than ever that restaurants could see this kind of help.

Categories
Business

The December Numbers Have been Terrible, however the Financial system Has a Clear Path to Well being

The December Numbers Were Awful, but the Economy Has a Clear Path to Health

It seemed reasonable that the employment numbers for the final months of 2020 would be as bad as the year as a whole.

It is fair to say that the loss of 140,000 jobs in December signals a relapse in the economic recovery in the summer and fall. Other figures in Friday’s report confirm this generally gloomy picture, such as the persistently depressed proportion of employed adults. In the debate about which letter of the alphabet best describes the pattern of the 2020 economy, the December numbers virtually rule out “V”.

But. But.

The details of this report along with everything else that is swirling around in economic policy and the financial markets are more optimistic. Thanks to monetary and fiscal incentives, there is an opportunity for 2021 to be the year of a remarkable upturn. the delayed effects of buoyant markets in recent months; and most importantly, the prospect of widespread coronavirus vaccination.

December’s numbers suggest an employment crisis limited to sectors dealing with the direct effects of pandemic stalemates. Contrary to the spring 2020 data, the latest numbers do not coincide with the widespread lack of demand in the economy that has made the recovery from recent recessions so long and so slow.

The largest job loss in December was in the leisure and hospitality industry, a sector that lost 498,000 jobs. Think about what that number represents: myriad restaurants, hotels, performance stages, and arenas that are closed; and hundreds of thousands of people are unemployed again and unsure when to return to work.

The good news is we know how and when these jobs can return. If enough Americans are vaccinated, they will likely feel comfortable returning to normal patterns of pastime. A real boom in these sectors is plausible later this year. American savings are going through the roof, and it is easy to imagine the demand for travel, concerts and the like being pent up.

Other sectors less directly affected by public health concerns – industries that were at a recessive level just a few months ago – continued to improve. You are not necessarily back to pre-pandemic levels, but are on track to get there for much longer.

Employment in construction is still 3 percent below pre-pandemic levels, but the sector created 51,000 jobs in December. At this rate it will get well again in spring. The situation is similar with production orders, which are still 4 percent lower than in February, but created 38,000 jobs in December.

The list of sectors that follow this basic pattern – still at a recession-compatible level but steadily retreating – is long and encompasses industries as diverse as trucking, property rental and leasing, and professional and business Services.

Updated

Jan. 8, 2021, 6:36 p.m. ET

Both politics and the market environment should create tailwinds for these sectors in 2021 and help them return to full health faster.

A booming stock market doesn’t lead to more economic activity overnight. As corporate executives create their investment plans and consumers make their spending decisions, rising stocks tend to have a positive effect. This would mean the positive impact of new market highs in the past few weeks should show as public health concerns subside.

December employment numbers cover a period before Congress reached a compromise pandemic relief package worth $ 900 billion. The bill includes improved unemployment benefits, among other things, that will help hundreds of thousands of workers whose jobs went missing in December, as well as $ 600 checks that are set to boost consumer spending in the coming months.

Additionally, Georgia’s Democratic victories this week and the resulting Senate majority make it more likely that these checks will soar to $ 2,000 per person. It also means that the Biden government will have the flexibility to set a more ambitious agenda, including infrastructure spending, that should support macroeconomic activity.

A Democratic Congress is also likely to provide more aid to states, helping one of the other areas of job loss in December along with leisure and hospitality (state and local governments cut 51,000 jobs in the last month).

A lot could still go wrong, such as a prolonged mistake in the vaccine launch or a market correction that damages business and consumer confidence. And none of this relieves the pain of the millions of Americans who are still unemployed.

But all together and more than ever since the pandemic began, the economy has a clear path back to full health.

Categories
Business

Fed Officers Fretted Over Virus Surge at December Assembly

Fed Officials Fretted Over Virus Surge at December Meeting

Federal Reserve officials cautiously watched a surge in coronavirus cases at their December 15-16 meeting, but hoped the vaccine breakthroughs could set the stage for a strong economic recovery in 2021.

“In view of the worsening pandemic across the country, expansion should slow even further in the coming months,” said minutes of the meeting of the Federal Open Market Committee published on Wednesday. “Even so, the positive vaccine news” was viewed as favorable to the medium-term economic outlook. “

Central bank officials kept interest rates at near zero at the meeting and pledged to purchase $ 120 billion in bonds each month “until substantial further progress is made in meeting the committee’s maximum employment and price stability targets” . Since March, they have rapidly increased their holdings of government and mortgage-backed debt to keep markets calm and many types of credit cheap.

Essentially, the Fed sets the price of money borrowed to manage demand in the economy and worsens conditions during tough times to fuel growth and recruitment. The central bank is also trying to keep price hikes stable at around 2 percent, though officials officially updated their approach to setting policy last year to emphasize that after years and years of weaker hikes, they would welcome slightly faster hikes.

Minutes showed that the Fed discussed the accounting guidelines in depth at the meeting, with “some” commenting that the new wording signaled that the Fed could accelerate bond purchases “if progress towards meeting the committee’s goals proves to be slower than expected to turn out “.

Many analysts had expected the Fed to shift its bond purchases onto longer-term debt in order to get a higher bang per dollar as short-term interest rates are already very low, but the logs suggest that there is little appetite for a switch. Only “a few participants said they were open” to shake the mix of purchases.

The Fed’s December meeting came as virus cases increased after Thanksgiving. Since then, the number of new cases has initially decreased, but then increased again.

Covid19 vaccinations>

Answers to your vaccine questions

With a coronavirus vaccine spreading out of the US, here are answers to some questions you may be wondering about:

    • If I live in the US, when can I get the vaccine? While the exact order of vaccine recipients may vary from state to state, most doctors and residents of long-term care facilities will come first. If you want to understand how this decision is made, this article will help.
    • When can I get back to normal life after the vaccination? Life will only get back to normal once society as a whole receives adequate protection against the coronavirus. Once countries have approved a vaccine, they can only vaccinate a few percent of their citizens in the first few months. The unvaccinated majority remain susceptible to infection. A growing number of coronavirus vaccines show robust protection against disease. However, it is also possible that people spread the virus without knowing they are infected because they have mild symptoms or no symptoms at all. Scientists don’t yet know whether the vaccines will also block the transmission of the coronavirus. Even vaccinated people have to wear masks for the time being, avoid the crowds indoors and so on. Once enough people are vaccinated, it becomes very difficult for the coronavirus to find people at risk to become infected. Depending on how quickly we as a society achieve this goal, life could approach a normal state in autumn 2021.
    • Do I still have to wear a mask after the vaccination? Yeah, but not forever. Here’s why. The coronavirus vaccines are injected deep into the muscles and stimulate the immune system to produce antibodies. This seems to be sufficient protection to protect the vaccinated person from disease. What is not clear, however, is whether it is possible for the virus to bloom in the nose – and sneeze or exhale to infect others – even if antibodies have been mobilized elsewhere in the body to prevent that vaccinated person gets sick. The vaccine clinical trials were designed to determine if people who were vaccinated are protected from disease – not to find out if they can still spread the coronavirus. Based on studies of flu vaccines and even patients infected with Covid-19, researchers have reason to hope that people who are vaccinated will not spread the virus, but more research is needed. In the meantime, everyone – including those who have been vaccinated – must imagine themselves as possible silent shakers and continue to wear a mask. Read more here.
    • Will it hurt What are the side effects? The vaccine against Pfizer and BioNTech, like other typical vaccines, is delivered as a shot in the arm. The injection in your arm feels no different than any other vaccine, but the rate of short-lived side effects seems to be higher than with the flu shot. Tens of thousands of people have already received the vaccines, and none of them have reported serious health problems. The side effects, which can be similar to symptoms of Covid-19, last about a day and are more likely to occur after the second dose. Early reports from vaccine trials suggest that some people may need to take a day off because they feel lousy after receiving the second dose. In the Pfizer study, around half developed fatigue. Other side effects occurred in at least 25 to 33 percent of patients, sometimes more, including headache, chills, and muscle pain. While these experiences are not pleasant, they are a good sign that your own immune system is having a strong response to the vaccine that provides lasting immunity.
    • Will mRNA vaccines change my genes? No. Moderna and Pfizer vaccines use a genetic molecule to boost the immune system. This molecule, known as mRNA, is eventually destroyed by the body. The mRNA is packaged in an oily bubble that can fuse with a cell, allowing the molecule to slide inside. The cell uses the mRNA to make proteins from the coronavirus that can stimulate the immune system. At any given moment, each of our cells can contain hundreds of thousands of mRNA molecules that they produce to make their own proteins. As soon as these proteins are made, our cells use special enzymes to break down the mRNA. The mRNA molecules that our cells make can only survive a few minutes. The mRNA in vaccines is engineered to withstand the cell’s enzymes a little longer, so the cells can make extra viral proteins and trigger a stronger immune response. However, the mRNA can hold for a few days at most before it is destroyed.

Officials expressed hope that vaccine proliferation, which has been sluggish in much of the US, will pave the way for economic recovery in the second half of 2021. They were aware that their prospects would depend on the success of this process and the path of the pandemic.

“The second half of the year looks more promising because of vaccinations,” said Loretta Mester, president of the Federal Reserve Bank of Cleveland, on a call to reporters this week.

But even if the rebound is remarkable, officials knew that if they take the economy off its feet, they will likely be patient.

Ms. Mester, who has historically favored higher rates than many of her colleagues, said she probably wasn’t worried about 2.5 percent inflation. Her colleague Charles Evans, president of the Federal Reserve Bank of Chicago and this year’s monetary policy voter, said during an event Tuesday that a 3 percent rise in prices “wouldn’t be too bad.”

The presidents of 11 of the Fed’s 12 regional banks share rotating votes on monetary policy. The President of the Federal Reserve Bank of New York and members of the Board of Governors in Washington continuously vote on interest rates.

In the near future, rather than directing a rapid recovery, the economic slowdown is likely to be the Fed’s biggest challenge. According to ADP, private payrolls fell by 123,000 jobs between November and December. The government’s official employment report on Friday is expected to show either a significant slowdown in employment growth or a return to direct losses.

The December minutes read: “Participants saw increasing challenges for the economy in the months ahead as the continued surge in Covid-19 cases and the associated mandatory and voluntary measures resulted in greater social distancing and subdued spending, particularly for Services that are required personally Contact. “

The Fed’s December meeting preceded two major developments that could affect the economy in the near term. At the end of last month, Congress agreed to provide additional support to the American economy in the form of a $ 900 billion aid bill.

And the Democrats were on the verge of retaking the Senate, which could pave the way for easier adoption of President-elect Joseph R. Biden Jr.’s priorities, which could include additional tax aid for businesses and families.

“The Fed will welcome greater prospects for fiscal support, which most officials believe is better suited to the challenges of the Covid cycle than to monetary policy,” Evercore ISI economists wrote in a research note on Wednesday.

Categories
Health

December is shaping as much as be the Covid pandemic’s deadliest month but within the U.S.

December is shaping up to be the Covid pandemic's deadliest month yet in the U.S.

Sammie Michael Dent Jr., the grandson of Florence Bolton, a coronavirus disease (COVID-19) patient who died November 2 at Roseland Community Hospital, carries her coffin to Zion Evangelical Lutheran Church on the south side of Chicago, Illinois. USA, December 9, 2020.

Shannan Stapleton | Reuters

December is well on the way to becoming the deadliest month of the Covid-19 pandemic in the United States. It tops April when more than 60,738 Americans lost their lives to the coronavirus.

Hospitals in the US are being overwhelmed and people are dying in record numbers again – even as US and state officials rush to get life-saving doses of vaccine across the country. December is already the second deadliest month of the pandemic in the United States, according to Johns Hopkins University, with more than 42,500 Covid-19 deaths on Thursday and two weeks left each month.

At the start of the pandemic in April, hospitals in the New York City area were overwhelmed by Covid patients and doctors knew little about how to treat them. The country also didn’t test as many people for the virus in April, so the death toll this month could be higher than the original data shows, epidemiologists warn.

The US currently reports more than 2,600 deaths per day based on a weekly average, up from an average of approximately 2,025 deaths per day in April.

The record comes as the US begins rolling out a vaccine for the disease. But health officials and medical staff are warning that a vaccine will not immediately rid the country of the outbreak.

Dr. Syra Madad, senior director of the system-wide program for specific pathogens at New York City Health + Hospitals, described the recent surge in Covid as “a terrible case of Deja Vu.”

“It’s a terrible PTSD to know that we were first on the front lines and in the epicenter and now see that the whole nation is not learning from the lessons of the Northeast,” she said in a telephone interview. “You can’t magically think that the virus will go away on its own without a strategy for containment and mitigation.”

She added that the outbreak will continue to worsen before it gets better based on current trends.

“If you don’t do anything, it will absolutely get worse,” she said. “When cases are widespread we have to put restrictions in place, but I think we can be a lot more strategic because we’ve learned a lot about the spread of the virus.”

People need to hold on and limit their interactions with others while the country works to roll out the vaccine, Madad said.

“We have an incredible scientific achievement that is benefiting healthcare workers across the country,” said Dr. Leana Wen, a former Baltimore health commissioner, in a telephone interview. “At the same time, we’re seeing an unprecedented number of people getting sick, hospitalized, and dying.”

The country reported more than 233,200 new infections and more than 3,200 deaths on Thursday, according to Hopkins data. Many hospitals across the country are running out of intensive care units, standard beds and staff to handle the surge in patients, data from the Department of Health and Human Services shows.

Large states like Texas, Illinois, Pennsylvania, and California each reported nearly 3,000 deaths or more this month, which is a significant fraction of the national total. However, many smaller states have been disproportionately affected by the virus, with North Dakota, South Dakota, Iowa, New Mexico, and Kansas topping the list when it comes to population adjustment.

Despite some signs of a slowdown in daily new cases in the Midwest, the number of new cases is still rising across the country, hitting a new high of nearly 217,000 average cases per day as of Thursday.

“Basically, we are now seeing the worst-case scenario of what we predicted a few months ago. This is the deadly winter that we thought could be the case if people don’t take the necessary measures to.” protect yourself and your loved ones, “said Wen, emergency physician and public health professor at George Washington University.

Some state and local officials are introducing new restrictions to contain the spread of the virus and protect hospitals from congestion. California Governor Gavin Newsom has issued orders that trigger restrictions when regions of the state reach a certain level of intensive care occupancy. Several regions have sparked new home stays.

And New York Mayor Bill de Blasio has been calling for further restrictions in the last few days, stating that “all forms of restrictions must be on the table”. He launched the idea of ​​a strict post-Christmas restriction while Governor Andrew Cuomo said restrictions could hit New York in January if current trends persist.

As officials ponder implementing new restrictions, the Centers for Disease Control and Prevention has urged Americans not to travel for Christmas and restrict all non-essential travel.

“I’m very worried about Christmas,” Wen said. “There are so many viruses across the country and I just hope people will remember that the end is not far away. We just have to get through this vacation and this winter.”

– CNBC’s Nate Rattner contributed to this report.